From
touchpoints to journeys: Seeing the world as customers do
To maximize customer satisfaction, companies have long
emphasized touchpoints. But doing so can divert attention from the more
important issue: the customer’s end-to-end journey.
When most companies focus on customer experience
they think about touchpoints—the individual transactions through which
customers interact with parts of the business and its offerings. This is
logical. It reflects organization and accountability, and is relatively easy to
build into operations. Companies try to ensure that customers will be happy
with the interaction when they connect with their product, customer service,
sales staff, or marketing materials. But this siloed focus on individual touchpoints
misses the bigger—and more important—picture: the customer’s end-to-end
experience. Only by looking at the customer’s experience through his or her own
eyes—along the entire journey taken—can you really begin to understand how to
meaningfully improve performance.
Customer journeys include many
things that happen before, during, and after the experience of a product or
service. Journeys can be long, stretching across multiple channels and
touchpoints, and often lasting days or weeks. Bringing a new customer on board
is a classic example. Another is resolving a technical issue, upgrading a
product, or helping a customer to move a service to a new home. In our
research, we’ve discovered that organizations that fail to appreciate the
context of these situations and manage the cross-functional, end-to-end
experiences that shape the customer’s view of the business can prompt a
downpour of negative consequences, from customer defection and dramatically
higher call volumes to lost sales and lower employee morale. In contrast, those
that provide the customer with the best experience from start to finish along
the journey can expect to enhance customer satisfaction, improve sales and
retention, reduce end-to-end service cost, and strengthen employee satisfaction.
This is especially true in today’s
multitouchpoint, multichannel, always-on, hypercompetitive consumer markets.
The explosion of potential customer interaction points—across new channels,
devices, applications, and more—makes consistency of service and experience
across channels nigh impossible—unless you are managing the journey, and not
simply individual touchpoints. Indeed, research we conducted in 2015 involving
seven EU telecom markets found that when consumers embarked on journeys that
involved multiple channels their experience was materially worse than during
single-channel experiences, whether those experiences were digital or not.
The trouble with touchpoints
Consider the dilemma that
executives faced at one media company. Customers were leaving at an alarming
rate, few new ones were available for acquiring in its market, and even the
company’s best customers were getting more expensive to retain. In economic
terms, a retained customer delivered significantly greater profitability than a
newly acquired customer over two years. Churn, due to pricing, technology, and
programming options, was an increasingly familiar problem in this
hypercompetitive market. So was retention. The common methods for keeping
customers were also well known but expensive—tactics like upgrade offers and
discounted rate plans, or “save desks” to intercept defectors.
So the executives looked to another
lever—customer experience—to see if improvements there could halt the exodus.
What they found surprised them. While the company’s overall
customer-satisfaction metrics were strong, focus groups revealed that a large
number of customers left because of poor service and shoddy treatment over
time. “How can this be?” one executive wondered. “We’ve measured customer
satisfaction for years, and our call centers, field services, and website
experience each score consistently over 90 percent. Our service is great!”
As company leaders probed further,
however, they discovered a more complex problem. Most customers weren’t fed up
with any one phone call, field visit, or other individual service
interaction—in fact, most customers didn’t much care about those singular
touchpoint events. What was driving them out the door was something the company
wasn’t examining or managing—the customers’ cumulative experience across
multiple touchpoints, multiple channels, and over time.
Take new-customer onboarding, for
example, a journey that spanned about three months and involved an average of
nine phone calls, a home visit from a technician, and numerous web and mail
interactions. At each touchpoint, the interaction had at least a 90 percent
chance of going well. But average customer satisfaction fell almost 40 percent
over the course of the entire journey. The touchpoints weren’t broken—but the
onboarding process as a whole was.
Many of customers’ numerous calls
during the process represented attempts to clarify product information, fix
problems with an order, or understand a confusing bill. Most of these service
encounters were positive in a narrow sense—employees answered the questions or
solved the issues as they arose—but the underlying problems were avoidable, the
root causes left unaddressed, and the cumulative effect on customer experience
was decidedly negative. The company’s touchpoint-oriented, metric-driven way of
thinking about customer experience had a large blind spot.
Solving the problem would be worth
hundreds of millions of dollars, but the company needed a whole new way of
thinking about and managing its service operations to identify and reimagine
the customer-experience journeys that mattered most.
More touchpoints, more complexity
The problem encountered by the
media company is far more common than most organizations care to admit and is
often difficult to spot. At the heart of the challenge is the siloed nature of
service delivery and the insular cultures, behaviors, processes, and policies
that flourish inside the functional groups that companies rely on to design and
deliver their services. In many cases, these groups are also the keepers of the
touchpoints that shape and measure how the company’s activities meet the
customer’s—say, an in-store conversation with a sales rep, a visit to the
company’s website, or a query to the company’s call center. Whether because of
poorly aligned incentives, management inattention, or simply human nature, the
functional groups that manage these touchpoints are constantly at risk of
losing sight of what the customer sees (and wants)—even as the groups work hard
to optimize their own contributions to the customer experience.
The media company’s sales
personnel, for example, were measured and rewarded for closing new sales—not
for helping customers navigate a complex menu of technology and programming
options to find the lowest-price offer that met their needs. Yet frustration
about complex pricing for high-end equipment, confusion about promotions, and
surprise over program lineups were all frequent causes of dissatisfaction later
in the process, as well as frequent sources of queries to the company’s call
centers. Executives knew that each of these discrete items was a challenge—but
only when they took a broader end-to-end view did it become apparent that even
though each individual link in the service-delivery chain appeared healthy, the
cumulative effect was quite the opposite.
The answer isn’t to replace
touchpoint management and thinking. Indeed, the expertise, efficiencies, and
insights that functional groups bring to bear are important, and touchpoints
will continue to represent invaluable sources of insights—particularly in the
fast-changing digital arena. Instead, companies need to recognize and address
the fact that—at least, in most cases—they are simply not wired to naturally
think about the journeys their customers take. They are wired to maximize
productivity and scale economies through functional units. They are wired for
transactions, not journeys.
So how should companies tackle this
issue? In our experience, six actions are critical to managing
customer-experience journeys (articles elsewhere in this volume explore several
of these topics in depth):
·
Step
back and identify the nature of the journeys customers take—from the customer’s
point of view.
·
Understand
how customers navigate across the touchpoints as they move through the journey.
·
Anticipate
the customer’s needs, expectations, and desires during each part of the
journey.
·
Build
an understanding of what is working and what is not.
·
Set
priorities for the most important gaps and opportunities to improve the
journey.
·
Come
to grips with fixing root-cause issues and redesigning the journeys for a
better end-to-end experience.
The amount of time it can take to
identify journeys, understand performance, and redesign the experience can vary
widely from company to company. For companies seeking only to fix a few glaring
problems in specific journeys, top-down problem solving can be enough. But
those that want to transform the overall customer experience may need a
bottom-up effort to create a detailed road map for each journey, one that
describes the process from start to finish and takes into account the business
impact of enhancing the journey and sequencing the initiatives to do so. For
many companies, combining operational, marketing and customer, and
competitive-research data to understand journeys is a first-time undertaking,
and it can be a long process—sometimes lasting several months. But the reward
is well worth it; creating a fact base allows management to clearly see the
customer’s experience and decide which aspects to prioritize.
Journeys explained
To better see how customer journeys
work, let’s look at a measurable and routine service event—say, a product
query—from the point of view of both the company and the customer. The company
may receive millions of phone calls with questions about its product, and it is
imperative to handle each of these calls well. But when customers are asked to
recall their side of the experience months later, it is highly unlikely that
they would describe such calls simply as a “product question.” That’s because
the call has a context, and understanding it is the key to understanding
customer journeys.
The customer might have been trying
to ensure uninterrupted service after moving, for example, or was confused
about renewal options at the end of a contract, or was trying to fix a nagging
technical problem. A company that effectively manages its customer journeys
would still do the best job it could with the individual transaction—but its
agents would also understand the context for the call, address the root cause
for the customer’s query, and create the feedback loops to help the company
continuously improve the wide range of upstream and downstream interactions
that surround (and sometimes cause) the call. That is a broader lens than most
call centers apply (see sidebar, “A customer-journey scorecard”).
Most executives we talk to readily
grasp the journey concept but wonder whether perfecting journeys pays off in
hard-dollar outcomes. Our research, in the form of annual cross-industry
customer-experience surveys that span pay TV, retail banking, auto insurance,
and other sectors, shows that it does. Companies that excel in delivering
journeys tend to win in the market. In both the insurance and TV industries,
for example, better performance on journeys correlates strongly with faster
revenue growth; in fact, in measurements of customer satisfaction with the
firms’ most important journeys, a one-point improvement on a ten-point scale
corresponds to at least a three-percentage-point increase in the revenue-growth
rate .
Moreover, the companies that
perform best on journeys have a more distinct competitive advantage than those
that excel at touchpoints; in one of the industries we surveyed, the gap on
customer satisfaction between the top- and bottom-quartile companies on journey
performance was 50 percent wider than the gap between the top- and
bottom-quartile companies on touchpoint performance. Put simply, most companies
perform fairly well on touchpoints, but distinctive performance on journeys can
set a company apart.
Why are journeys so much more
effective at driving results? For one thing, our research suggests that
journeys are more predictive of desired outcomes. In most industries, the three
journeys that matter most to customers account for more than 25 percent of
total customer satisfaction. Indeed, across industries, performance on journeys
is substantially more strongly correlated with customer satisfaction than
performance on touchpoints—and performance on journeys is significantly more
strongly correlated with business outcomes such as revenue, churn, and repeat
purchase. In other words, delivering a distinctive journey experience makes it
more likely that customers repeat a purchase, spend more, recommend to their
friends, and stay with your company.
Journeys versus touchpoints: Some practical examples
Consider the case of the local
operating entity of a global insurance player. Market leadership in one of its
largest lines of business, car insurance, was under siege by both established
players and new entrants. Executives knew that they would have to innovate in
order to differentiate their offering. They also knew that for a long time the
fragmented nature of their customer experience had been a problem: many of
their customers bought their product and managed their claims via a broker.
When a car needed repair after an incident, a local mechanic typically managed
the process, with little involvement from the car insurer. With so many
individual touchpoints outside the company’s control, the insurer struggled to
provide a consistently high-quality and repeatable experience.
Research identified consistent and
clear communications as one of the most important elements of customer
experience. Improving the experience started with offering insurance policies
that were easy to read, understand, and compare with those of competitors. But
even more important to customers was securing answers to questions regarding
the status of their car while under repair. What was being replaced or
repaired? When would they get the car back?
The effort made it apparent that
there was potential to resolve a critical frustration for customers during a
very important part of their overall customer journey with the insurer. It also
revealed the opportunity to build a deeper engagement and relationship. So the
company set out to provide an end-to-end communications “glue” to what had been
a multitouchpoint, multiparty customer journey.
Executives rapidly created a
prototype using a sample of 20 current customer cases. Each day, the company
would track where the case was and provide a simple update to the customer via
email or text. The company set up “personal contacts” for each customer who
would send the emails, serve as a single source of contact, and phone the
customer directly if there was a material update to be announced, such as a
delay in finishing the work. Overall, every effort was made to personalize
communication during an important phase in the customer’s journey. By the end
of the pilot, the company had learned a number of lessons related to the
appropriate frequency of contact, the importance of using the customer’s
preferred channels, and timing communications. The company also learned how to
scale the service without adding substantial costs, largely by using underutilized
call-center resources at off-peak hours.
The impact was profound. Net
promoter scores for the customer journey climbed by 15 percentage points, and
by 50 points for difficult cases, such as when repairs were first attempted but
eventually the car had to be declared a total write-off. Delighted customers
sent thank-you notes to the company, and brokers and mechanics reported
significant improvements in their dealings with customers, who were now much
better informed.
Or consider the European energy
retailer that identified the “home moving” journey as a particular point of
dissatisfaction among its customers, as well as a significant source of churn.
The company mobilized a cross-functional team (service, sales, marketing, and
IT) to understand what was happening—from the customer’s viewpoint—along the
journey to prompt these high levels of customer dissatisfaction. What the team
found was a basic journey that was performing poorly across the various
functions and departments that supported it.
The journey’s design suffered from
several features that imposed unnecessary inconvenience and anxiety on
customers when moving. For example, customers had to contact the company no
earlier than ten days before their move date to provide all of the necessary
details—otherwise the IT systems would not record the information. An organized
customer, one who called perhaps a month before the move date to set everything
up, would find that his or her move details were never recorded. Customers also
had only one method—voice calling—to contact the company.
Once the customer had notified the
company of moving plans, he or she would receive several different forms of
communication. Upon examination, the team found that some of the communications
were redundant, while others contradicted other accurate pieces of
communications. All this generated additional anxiety and confusion.
Poor communication, in fact, was
the single largest reason that customers called into the call centers, and it
was another source of dissatisfaction. Customer-service agents had no method of
tracking where the customer was on his or her moving journey. More often than
not, this meant that agents had to hand off the inquiry to a back-office team
for further investigation and problem resolution. The back-office team,
inundated with these types of inquiries, suffered delays in getting back to the
customer with a resolution, naturally producing additional calls to the call
center—and so on.
The good news was that, for the
first time, the company understood the benefit of taking an end-to-end view of
the customer journey and the importance of understanding how interdependent
individual touchpoints were along the journey.
Several improvements were designed
and implemented rapidly to address the key problem areas. The moving journey
was redesigned into a signature customer journey for this energy-retail
company: customers now have the flexibility to provide the company with their
move information at a time that suits them. They also have the option to use a
phone, the web, or a smartphone app to contact the company; all essential
communications are now delivered consistently in a single “home movers” pack.
Finally, the company now incorporates into the home-movers pack discount
vouchers for do-it-yourself stores, tradespeople, and restaurants in the
area—creating a welcoming cluster of local businesses (the businesses also
happen to be customers of the energy retailer’s small and midsize business
unit, thus creating a positive customer experience across all customer
segments). The result? A 50 percent increase in customer satisfaction from the
starting position, and a 15 percent reduction in the company’s customer-service
cost. Employee satisfaction increased by 20 percent and churn related to this
journey was cut by more than half.
In most cases, companies are simply
not naturally wired to think about the journeys their customers take. Thinking
about customer journeys—instead of traditional touchpoints—can require an
operational and cultural shift that engages the organization across functions
and from top to bottom. For the companies that master it, the reward is higher
customer and employee satisfaction, revenue and cost improvements, and an
enduring competitive advantage.
About the Authors
Nicolas Maechler is a principal in McKinsey’s
Paris office, Kevin Neher is a principal in the Denver office,
and Robert Park is an associate principal in the London
office.
The authors wish to thank Conor
Jones and Laird Rawsthorne for their contributions to this article.
FOR THE ARTICLE WITH EXHIBITS http://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/from-touchpoints-to-journeys-seeing-the-world-as-customers-do?cid=other-eml-alt-mip-mck-oth-1603
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